New Ulm Power Plant

The Center Street Station, also known as the New Ulm Power Plant in Minnesota was fired by coal until the the 1970 enactment of the Clean Air Act, when the municipal power plant was converted to natural gas. In October 2010, citing high natural gas costs, the city of New Ulm said it is seeking state and federal approval for a $23 million project to convert a boiler at the plant back to coal use — coal that would come from Wyoming's Powder River Basin via train and then truck. Besides generating electricity, the power plant produces steam that is used to heat downtown buildings, including the large AMPI butter plant.

Defenders of the plan, such as the City Council and a citizens commission, say natural gas prices have come down in summer 2010 to about $5 per unit, but in 2008 was costing the city $15 per unit, and could again rise due to increased demand for natural gas, making coal cheaper. Coal for the New Ulm plant would be delivered by rail to a sugar beat processing plant near Olivia and then trucked to New Ulm at the rate of 10 truckloads a day. The city hopes that a proposed new rail line to be built by DM&E would deliver Wyoming coal right to the plant. Large coal-burning plants can get coal for about $20 per ton delivered to their doorstep, according to New Ulm Public Utilities engineer Pat Wrase, but the cost of getting coal up to New Ulm would be about $50 a ton. Even then, Wrase said, the cost would be about half the current cost of natural gas.

The city has taken steps in recent years to diversify its power sources, signing long-term contracts for power produced by others, including a contract with Heartland Consumers Power District, which supplies about 75 percent of New Ulm’s power needs. The city also buys wind power — 11 percent of its current power usage. The amount of wind-produced power the city buys is to go to 24 percent by 2019. The city’s attempt to erect its own wind turbines fell through after opposition from Nicollet County — just across the river — where the city had hoped to erect towers. The turbines couldn’t be located on the bluffs above New Ulm in Brown County because they’d be too close to the airport.

The city is now waiting to see if it will get necessary approvals from the Minnesota Pollution Control Agency and the federal Environmental Protection Agency for the coal conversion, but Wrase said the process has been complicated. The city filed a permit request in December 2009. Since then, the city has made changes to its permit proposal, in part because of new EPA air emission requirements for nitrogen dioxide, which have strengthened standards for monitoring to help curb the formation of acid rain and pollutants like smog under the Transport Rule.

The local group Citizens For Clean Energy and the Sierra Club also sent a petition to the state’s Environmental Quality Board asking that a more detailed Environmental Assessment Worksheet be done on the project, and for the city to hold public hearings on the current proposal. The groups say there are other options, and that future climate change legislation, including proposed carbon fees on coal emissions, could drive up operating costs of a coal plant.

Project Details
Sponsor: City of New Ulm, MN Capacity: one boiler '''Projected in service: Status: Active

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